9:48 PT - DM: Good morning and welcome to Macworld's live coverage of the iPhone 3.0 event. I'm Associate Editor Dan Moren alongside Editorial Director Jason Snell and we're coming to you live from the Apple Town Hall at Infinite Loop.

9:49 PT - DM: We're being serenaded to the sounds of what appears to be Jack Johnson while the various attendees find their seats. Phil Schiller's up at the front of the room, as is Greg Joswiak. They're really packing them in here; it's a pretty small venue.

9:54 PT - DM: Very kindly they've actually provided power strips for us; sadly, the same cannot be said for network connections.

9:55 PT - DM: "15 Step" by Radiohead. "You, Me & The Bourgeoisie" by The Submarines playing. We've been told that we're beginning in a just a moment here. And now we're on to Dave Matthews or something. Of course, as soon as I know a song, they change it. Thanks, Apple.

10:01 PT - DM: And here we go. Greg Joswiak has come out for the introductory remarks. A lot of iPhone app developers are here as well. It's a preview of iPhone 3.0 OS, naturally. Scott Forstall will be joining him as well as we take a look at the future plans.

10:01 PT - DM: A recap: the iPhone is now in 80 countries around the world, as of this week. We started two years ago at one country, and now 80 countries. Set a goal of 10 million iPhones in first calendar year, 2008, and they ended up selling 13.7 million.

10:02 PT - DM: Sales from June 2007 from December 2008, 17 million iPhones sold, and the sales definitely accelerated with the iPhone 3G. iPhone not the only product running iPhone OS; there's the touch. Over same time period, 30 million iPhone OS devices sold through end of 2008. Great opportunity for app developers.

10:03 PT - DM: First introduced beta of iPhone SDK a year ago. In one year, over 800,000 downloads of the SDK. There are also over 50,000 members of the paid developer program. Most of the developers, over 60%, were new to Apple platforms. Big developers and small developers alike. A quote from Michel Guillemot of Gameloft saying that the iPhone OS is the "next great development platform."

10:04 PT - DM: The small guys can succeed as well. Steve Demeter of Trism, who's here today, has made a short video. He's talking about being a long-time gamer, and action shots of him coding!

10:06 PT - DM: "The App Store is a meritocracy," says Demeter.

10:06 PT - JS: Since this is partially an announcement of the new SDK for developers, it's not too surprising that there's a focus on developers. Developers are in the audience, too. Also, good choice to lead off with Joswiak, I think -- he's always been one of Apple's most credible and likeable spokespeople.

10:06 PT - DM: Over 25,000 apps in the store today. A lot of curiosity of the app store admission process. 96% of apps submitted are approved. Moving apps through the store faster than ever; 98% of apps approved in 7 days or less. Now have passed 800 million downloads on the App Store in 8 months time.

10:08 PT - DM: So clearly we've created something profound. But this is just the beginning; imagine where it's going to be in the comings months. Joz is introducing Scott Forstall to talk about iPhone OS 3.0

10:08 PT - DM: Scott looking very hip in a black zip-up. I wonder who does his hair. 3.0 is a major update to the iPhone OS. Comes with "incredible features" for developers and customers. Here's what's on tap for developers.

10:08 PT - DM: SDK announced a year ago, and enabled developers to use same APIs and tools used internally. The goal was to make developers successful, by giving them the best tools, APIs, and frameworks for building applications. Apple was blown away by what developers did with it. Spent the last year to make the SDK even better. iPhone 3.0 brings next generation of SDK (apparently with a weird globe app).

10:09 PT - DM: More than 1,000 new APIs for developers. Scott's going to tell us a little bit about enhancements to the App Store. The App Store is a great business deal—most of this is recap on how the App Store currently works. 70% of revenue goes straight to the developers, who are paid monthly.

10:11 PT - DM: Some developers have come to Apple saying there are other business models they'd like: subscriptions, for example. Magazine publishers would like to have those; game developers would like to be able to sell additional levels from inside the game; other new content that developers might want to sell from inside the application—ebooks, for example. Ebook developers would like to sell ebook app, and then put bookstore in the app. All of these additional purchase models will be supported in iPhone 3.0 with In-App Purchase.

10:12 PT - DM: He's showing off a magazine app, where you can purchase 6 more months for $4.99. Here's a game, where you can purchase additional levels from inside the app. Now, here's a city guide, where you can sell different guides from inside the app. The whole thing is tied into the iTunes Store; tap on "buy" and it brings up the standard iTunes credential panel.

10:13 PT - JS: This is a big addition in terms of flexibility, but it also lets certain content providers finally take advantage of the store. For example, a newspaper could sell a premium subscription via their iPhone app. (Might this help save the newspapers from destruction?) Likewise it lets you download a single app and then add content to it. Nice. Before there were issues about apps for content providers, because they last forever. It was just a one-time fee. Now publishers can charge monthly or yearly (or whatever) and get an ongoing revenue stream.

10:14 PT - DM: The business model for in-app purchase is same as App Store. Developer sets price; 70% of the revenue for developer (Apple takes the 30% cut, but no credit card or hosting fees). This is for paid apps only. Free applications remain free; you can't buy things from inside free applications.

10:15 PT - DM: Peer to Peer connectivity—especially good for peer-to-peer games. Now an API lets you find all the other iPhones/iPod touches in the area playing the same game, so now you can play games with your friends over the network locally. Automatic discovery, all over Bluetooth (not via Wi-Fi), and there's no pairing—completely seamless. It also uses Bonjour. Plus, it's not just for games—works for any peer-to-peer application.

10:16 PT - JS: Using Bluetooth is really smart, since it means you can play games or share information with anyone, regardless of whether or not there's a wi-fi network around. Makes it much easier. (But what does that mean about iPod touch?)

10:16 PT - DM: Here's an example: you'd like to send somebody a contact. Your company could build an application that will find your colleague's phone and share that contact.

10:17 PT - DM: Next up, accessories. Thousands of developers are building thousands of accessories that work with iPods and iPhones. Here's a speaker, for example: plug your iPhone in and listen to your music. With iPhone 3.0 support is going to the next level: enable accessory developers to build custom applications that talk right to the accessories. Speaker manufacturer can build an equalizer app that can adjust settings of the speaker. Or an FM Transmitter; you can build an app to help find the optimal frequency and tunes it automatically.

10:18 PT - JS: This has been a huge request for some time -- giving apps access to hardware attached via the dock connector. The possibilities are really endless. Certainly accessory vendors will be jumping for joy at this news. And Apple's suggestion that this could be used in medicine is fascinating -- Apple really loves showing off the medical industry at these events.

10:18 PT - DM: Another category: medical applications. For example, a blood pressure cuff that talks to the phone and can help you track your blood pressure over time. So, developers can now take more advantage of accessories, talking to accessories via dock-connector *or* via Bluetooth. You can also build your own custom protocols, as well as use the standard protocols (listening to music, for example).

10:19 PT - JS: I'm sensing a strong support for Bluetooth in this presentation so far. Given how bad Bluetooth has been on the iPhone up to now, I'm really encouraged. Is there more?

10:20 PT - DM: Next up is Maps. Worked with Google to build incredible Maps application. Developers would like to embed map into application, but would like a CocoaTouch control that can wrap Maps and insert into applications, and that's what they're offering in iPhone 3.0. The heart of the Maps application is now an API that allows you to embed a map directly in your app. As an example, here's a Concierge application that embeds a map—supports satellite, hybrid, map views, adding own locations, pinch-and-zoom, GPS, and Wi-Fi/cell location. Can even reverse geocode your location.

10:22 PT - DM: Developers can also use Core Location as basis for turn-by-turn direction applications (score one for my wishlist!). GPS, Wi-Fi, and cell location. There is one catch however: bring your own maps. Due to licensing, they can't use built-in map tiles for turn-by-turn (that'll be Google's API license). But you can use your own maps.

10:23 PT - JS: Big win. Every iPhone can be its own GPS nav system once 3.0 arrives. They're really checking all the boxes, aren't they?

10:22 PT - DM: Push notifications. "You know, we're late on this one." Expected to have it up in production by end of year, but they didn't. There are a few reasons: within two months of launching App Store, there were already 1,000 applications. Huge number of devs came to them and told them how excited they were, and the volumes were more than they'd expected, so they had to completely rearchitect it and make it really, really scalable. "Now we're good to go."

10:24 PT - JS: A little sigh of sadness from those of us who thought the lack of push notifications meant that Apple would be giving up on push notification and adding some support for background processes.

10:24 PT - DM: Why not just do background processes? It's not good for the customer: 1) battery life—phone can't sleep, can't go to lowest power state. They've been testing this with a popular IM client on a bunch of phones (Windows MObile, etc). Didn't send or receive any messages, just ran it in the background. Measured stand-by time. Stand-by time dropped by 80% or more just by having it run in the background. Using notifications, stand-by only decreased by 23%. 2) Performance: background processes chew up CPU cycles, so it's slowing down the foreground app. Hence, push notifications. Already working with third-party devs to use it.

10:26 PT - JS: It's all true. But there are still applications that really need to have some awareness of what's going on when they're not running. If it's not an option to run them at all, Apple is reducing the flexibility of the phone and it's risking falling behind Android and possibly even Palm in terms of flexibility and functionality. Push notification is not a cure-all.

10:25 PT - DM: Here's how it works. Example, IM application. While it's running, it's connected to the server, so you can just send information over the network. When app isn't running, it can uses the Apple notification system, which is persistently connected. There are three types of notifications: badges, audio alerts, and also text alerts—which appear just like SMS alerts. (This is all pretty similar to the notification system as described at last year's WWDC).

10:27 PT - DM: This model scales, Scott says. IT's a unified generic push notification service for all developers. They've also optimized it for mobile networks. Since they're in over 80 countries, with over 25 carriers, there are a bunch of different configurations. Apple does the hard work keeping the connection open. "And now it's really scalable and ready to go."

10:27 PT - DM: These are a few of the thousand APIs in iPhone 3.0. Also, in-app e-mail, proximity sensor is available, the built-in iPod library is now accessible, streaming audio and video (new standard over HTTP that goes through firewalls), shake API, data detectors, and in-game voice (built-in voice chat for games, for example). Just a few of the over 1,000 APIs for developers in the new SDK.

10:29 PT - DM: They called in a few developers to take a sneak peek at the iPhone 3.0. They're going to come up and show us what they managed to do in just a couple weeks. First up is Meebo.

10:29 PT - DM: Over 45 million sending over 5 billion messages a month, Meebo is one of the fastest growing social networks out there. Now coming native to the iPhone. Here's Seth Sternberg.

10:30 PT - DM: Sternberg's one of Meebo co-founders, and he's going to show us the application. Lets you use IM over the web and from the computer, no matter what IM network you use: AIM, MSN, Facebook, MySpace, and via partner sites like IGN and My Yearbook.

10:31 PT - DM: And there's a push notification asking if Seth can bring milk on the way home. Meebo felt that push notifications was the last ingredient they needed.

10:33 PT - DM: Next up is Electronic Arts. One of the largest game developers in the world, already have 10 games on the App Store including Tetris, Spore, Sim City, and Monopoly. Travis Boatman is going to tell us what they've done with 3.0.